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LEASES | 12 Months Ended
--- | ---
Sep. 30, 2025
Leases [Abstract] |
LEASES | 2. LEASES The Company engages in leasing transactions to meet the needs of the business. The Company leases certain manufacturing facilities, warehouses and distribution centers, office space, forklifts, vehicles and other machinery and equipment. The determination to lease, rather than purchase, an asset is primarily contingent upon capital requirements, duration of the forecasted business investment, and asset availability. The Company determines if an arrangement is a lease at inception and all arrangements deemed to be leases are subject to an assessment to determine the classification between finance and operating leases. The Company's significant assumptions and judgments in determining whether a contract is or contains a lease include establishing whether the supplier has the ability to use other assets to fulfill its service or whether the terms of the agreement enable the Company to control the use of a dedicated property, plant and equipment asset during the contract term. In the majority of the Company's contracts where it must identify whether a lease is present, it is readily determinable that the Company controls the use of the assets and obtains substantially all of the economic benefit during the term of the contract. In those contracts where identification is not readily determinable, the Company has determined that the supplier has either the ability to use another asset to provide the service or the terms of the contract give the supplier the rights to operate the asset at its discretion during the term of the contract, in which case the arrangement would not constitute a lease. Right-of-use assets and lease obligations are recognized based on the present value of the future minimum lease payments over the lease term as of the commencement date. The Company’s lease agreements have terms that include both lease and non-lease components. Lease component fees are included in the present value of future minimum lease payments. Conversely, non-lease components are not subject to capitalization and are expensed as incurred. Per ASC 842 “Leases,” the contractual interest rate is used to calculate the present value of the future minimum lease payments. However, the majority of the Company’s leases do not provide an implicit rate. Therefore, the Company's significant assumption and judgments in determining the discount rate include determining the incremental borrowing rate. The Company’s incremental borrowing rates are based on the term of the lease, the economic environment of the lease and the effect of collateralization. The valuation of the ROU asset also includes lease payments made in advance of the lease commencement date and initial direct costs incurred to secure the lease and is reduced for lease incentives. The lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise the options. Leases with an initial term of 12 months or less are classified as short-term leases and are not recorded on the consolidated balance sheets. The lease expense for short-term leases is recognized on a straight-line basis over the lease term. The Company has certain leasing agreements, related to leased vehicles available to our sales personnel, that contain guaranteed residual value terms, which are not expected to be triggered. The Company’s leasing portfolio does not contain any material restrictive covenants. Leases
(in thousands) |  | September 30, 2025 |  | September 30, 2024
Assets |  |  |  |
Operating lease assets |  | $ | 147,061 |  |  | $ | 171,047 |
Finance lease assets |  | 15,286 |  |  | 15,009 |
Right-of-use assets, at cost |  | $ | 162,347 |  |  | $ | 186,056 |
Less: accumulated amortization |  | (5,668) |  |  | (5,400) |
Right-of-use assets, net |  | $ | 156,679 |  |  | $ | 180,656 |
Liabilities |  |  |  |
Current liabilities: |  |  |  |
Current portion of operating lease liabilities |  | $ | 24,343 |  |  | $ | 19,547 |
Current portion of finance lease liabilities |  | 2,652 |  |  | 2,491 |
Current lease obligations |  | $ | 26,995 |  |  | $ | 22,038 |
Noncurrent liabilities: |  |  |  |
Operating lease liabilities |  | $ | 137,133 |  |  | $ | 156,788 |
Finance lease liabilities |  | 7,160 |  |  | 7,540 |
Long-term lease obligations |  | $ | 144,293 |  |  | $ | 164,328 |
Total lease obligations |  | $ | 171,288 |  |  | $ | 186,366 |
Lease Cost The following table summarizes lease costs by type of cost for the fiscal year ended September 30, 2025, and the fiscal year ended September 30, 2024. In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $39,726 and $6,453, respectively, for the fiscal year ended September 30, 2025 and $30,113 and $9,151, respectively, for the fiscal year ended September 30, 2024.
|  | Fiscal year ended
(in thousands) |  | September 30, 2025 |  | September 30, 2024
Amortization of right-of-use assets |  | $ | 38,093 |  |  | $ | 32,169 |
Interest on lease liabilities |  | 612 |  |  | 308 |
Variable lease costs |  | 2,439 |  |  | 2,914 |
Short term lease costs |  | 5,035 |  |  | 3,873 |
Total lease costs |  | $ | 46,179 |  |  | $ | 39,264 |
Maturity of Lease Liabilities The Company's maturity analysis of its lease liabilities as of September 30, 2025 is as follows:
(in thousands) |  | Financing Leases |  | Operating Leases
2026 |  | $ | 2,979 |  |  | $ | 29,941 |
2027 |  | 2,549 |  |  | 32,790 |
2028 |  | 1,939 |  |  | 30,288 |
2029 |  | 1,493 |  |  | 24,857 |
2030 |  | 1,050 |  |  | 22,153 |
2031 and after |  | 1,498 |  |  | 92,084 |
Total lease payments |  | $ | 11,508 |  |  | $ | 232,113 |
Less: Interest |  | (1,696) |  |  | (70,637) |
Present value of lease liabilities |  | $ | 9,812 |  |  | $ | 161,476 |
Lease Term and Discount Rate
|  | Fiscal year ended
|  | September 30, 2025 |  | September 30, 2024
Weighted-average remaining lease term (years) |  |  |  |
Operating leases |  | 7.5 |  | 8.2
Finance leases |  | 4.4 |  | 4.9
Weighted-average discount rate |  |  |  |
Operating leases |  | 6.5 | % |  | 6.4 | %
Finance leases |  | 6.0 | % |  | 6.0 | %
LEASES | 2. LEASES The Company engages in leasing transactions to meet the needs of the business. The Company leases certain manufacturing facilities, warehouses and distribution centers, office space, forklifts, vehicles and other machinery and equipment. The determination to lease, rather than purchase, an asset is primarily contingent upon capital requirements, duration of the forecasted business investment, and asset availability. The Company determines if an arrangement is a lease at inception and all arrangements deemed to be leases are subject to an assessment to determine the classification between finance and operating leases. The Company's significant assumptions and judgments in determining whether a contract is or contains a lease include establishing whether the supplier has the ability to use other assets to fulfill its service or whether the terms of the agreement enable the Company to control the use of a dedicated property, plant and equipment asset during the contract term. In the majority of the Company's contracts where it must identify whether a lease is present, it is readily determinable that the Company controls the use of the assets and obtains substantially all of the economic benefit during the term of the contract. In those contracts where identification is not readily determinable, the Company has determined that the supplier has either the ability to use another asset to provide the service or the terms of the contract give the supplier the rights to operate the asset at its discretion during the term of the contract, in which case the arrangement would not constitute a lease. Right-of-use assets and lease obligations are recognized based on the present value of the future minimum lease payments over the lease term as of the commencement date. The Company’s lease agreements have terms that include both lease and non-lease components. Lease component fees are included in the present value of future minimum lease payments. Conversely, non-lease components are not subject to capitalization and are expensed as incurred. Per ASC 842 “Leases,” the contractual interest rate is used to calculate the present value of the future minimum lease payments. However, the majority of the Company’s leases do not provide an implicit rate. Therefore, the Company's significant assumption and judgments in determining the discount rate include determining the incremental borrowing rate. The Company’s incremental borrowing rates are based on the term of the lease, the economic environment of the lease and the effect of collateralization. The valuation of the ROU asset also includes lease payments made in advance of the lease commencement date and initial direct costs incurred to secure the lease and is reduced for lease incentives. The lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise the options. Leases with an initial term of 12 months or less are classified as short-term leases and are not recorded on the consolidated balance sheets. The lease expense for short-term leases is recognized on a straight-line basis over the lease term. The Company has certain leasing agreements, related to leased vehicles available to our sales personnel, that contain guaranteed residual value terms, which are not expected to be triggered. The Company’s leasing portfolio does not contain any material restrictive covenants. Leases
(in thousands) |  | September 30, 2025 |  | September 30, 2024
Assets |  |  |  |
Operating lease assets |  | $ | 147,061 |  |  | $ | 171,047 |
Finance lease assets |  | 15,286 |  |  | 15,009 |
Right-of-use assets, at cost |  | $ | 162,347 |  |  | $ | 186,056 |
Less: accumulated amortization |  | (5,668) |  |  | (5,400) |
Right-of-use assets, net |  | $ | 156,679 |  |  | $ | 180,656 |
Liabilities |  |  |  |
Current liabilities: |  |  |  |
Current portion of operating lease liabilities |  | $ | 24,343 |  |  | $ | 19,547 |
Current portion of finance lease liabilities |  | 2,652 |  |  | 2,491 |
Current lease obligations |  | $ | 26,995 |  |  | $ | 22,038 |
Noncurrent liabilities: |  |  |  |
Operating lease liabilities |  | $ | 137,133 |  |  | $ | 156,788 |
Finance lease liabilities |  | 7,160 |  |  | 7,540 |
Long-term lease obligations |  | $ | 144,293 |  |  | $ | 164,328 |
Total lease obligations |  | $ | 171,288 |  |  | $ | 186,366 |
Lease Cost The following table summarizes lease costs by type of cost for the fiscal year ended September 30, 2025, and the fiscal year ended September 30, 2024. In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $39,726 and $6,453, respectively, for the fiscal year ended September 30, 2025 and $30,113 and $9,151, respectively, for the fiscal year ended September 30, 2024.
|  | Fiscal year ended
(in thousands) |  | September 30, 2025 |  | September 30, 2024
Amortization of right-of-use assets |  | $ | 38,093 |  |  | $ | 32,169 |
Interest on lease liabilities |  | 612 |  |  | 308 |
Variable lease costs |  | 2,439 |  |  | 2,914 |
Short term lease costs |  | 5,035 |  |  | 3,873 |
Total lease costs |  | $ | 46,179 |  |  | $ | 39,264 |
Maturity of Lease Liabilities The Company's maturity analysis of its lease liabilities as of September 30, 2025 is as follows:
(in thousands) |  | Financing Leases |  | Operating Leases
2026 |  | $ | 2,979 |  |  | $ | 29,941 |
2027 |  | 2,549 |  |  | 32,790 |
2028 |  | 1,939 |  |  | 30,288 |
2029 |  | 1,493 |  |  | 24,857 |
2030 |  | 1,050 |  |  | 22,153 |
2031 and after |  | 1,498 |  |  | 92,084 |
Total lease payments |  | $ | 11,508 |  |  | $ | 232,113 |
Less: Interest |  | (1,696) |  |  | (70,637) |
Present value of lease liabilities |  | $ | 9,812 |  |  | $ | 161,476 |
Lease Term and Discount Rate
|  | Fiscal year ended
|  | September 30, 2025 |  | September 30, 2024
Weighted-average remaining lease term (years) |  |  |  |
Operating leases |  | 7.5 |  | 8.2
Finance leases |  | 4.4 |  | 4.9
Weighted-average discount rate |  |  |  |
Operating leases |  | 6.5 | % |  | 6.4 | %
Finance leases |  | 6.0 | % |  | 6.0 | %

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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